The questions are correct. What is causing the change and what is the benefit to LASA? But is there a more important question? What is the benefit to me? The student investor? And then also to me, the guy who has put his money at risk.
First. This story is not a story for accountancy investing please bear with me till you read the post.
This is a story of special situation(s) plus turnaround, and has no basis in mathematics alone. This is a classic case of investing is art + science. More art. Not that I have the art, but this was the best opportunity I could find to learn as much as I could about the art side of investing and I jumped in.
The investing in this story is not about steady compounding etc so it is not suitable for everyone as not everyone can take time from their schedules to follow all the moving pieces and there are many moving pieces in this story. Usually, there are picked up one by one on the forum, it makes no sense to pick each moving part unless the whole picture is followed and mostly understood. There are much better candidates for vanilla investing. Why I liked this one is that it has the most to teach for further investing as it covers so many angles of investing.
I will point them out.
1. OSCL - Debt (Then you have to study, why did OSCL get caught up with so much debt (will make us study debt situations)
2. OSCL - LASA Demerger (Then, why the de-merger and how do the de-merger stories play out, we learn about de-mergers)
3. OSCL - Turnaround (Will it happen, how will it happen, what all can one expect if it does happen, we learn about turnarounds)
4. OSCL - Rights Issue - We learn about rights and propotional equity dilution, re-calculating EPS, rights issue pricing etc.
5. LASA - Growth (We learn about growth investing)
6. OSCL (Speciality Chem) LASA (VET API) - (Follow separate industries and markets and learn about potential of each)
7. Patience - In the light of so much evidence, data and noise to the contrary, this much noise does not happen with most companies, how do you keep your conviction? (One trait needed to learn to be able to hold on to this story).
This at-least to me was a case of patient learning. Of course, price is everything and I don't want to pay a tuition fee in money and happy to pay it in time, so entry prices were of utmost importance. Thus also - learn Value Based Investing.
Throw in some family drama (brothers splitting up, father selling shares in son's company and son selling shares in fathers company)
Also some serious pledging and de-pledging.
We threw in something new, and went to the final frontier; we also met the management of both companies. So doing management meets.
The learning has been immense.
I think, OSCL + LASA were the best teacher over the last year and one must love these stories if one wants to really learn investing. They expose every danger and also every reward of the investing business.
If one is going to invest over the long term, it seemed to me it is crucial to study stories like this, money is mostly always around to be made in the markets.
Now to the answers you wanted;
Why the de-merger, it is a scam by the promoters to get rid of debt?
The de-merger is to the best of our knowledge because of the two sons not getting along. It is not because of promoters taking investors for a ride.
This is best captured in the answer from @Akhil_7306. Really, closes the issue without argument. We all know very well, what listed company managements who want to take shareholders for a ride do. These guys have not done that.
Now, on the selling pointed out by the promoters, the selling was done by Pravin Herlekar. He is not the promoter in LASA. He is a shareholder like you and me. Why is he selling his shares. Well, there is about to be a rights issue in OSCL. Does it make any sense for the promoter of OSCL to have shares in LASA but have low and partly pledged shareholding in his own company? If it were me, I would do the same. I think he is selling LASA shares to collect and further subscribe to the rights issue of OSCL so he can increase his shareholding in the company in which he (Pravin) is the promoter, which is OSCL. If this is the case, it will become evident soon. We would all like to see Pravin arrange funds and increase his shareholding in OSCL actually.
One of the questions was the increased market-cap. Do we know who decides the listing price for the de-merged entity? It is not decided by the promoters. There is a price discovery process. So, why are we blaming them for manipulation?
Even after listing, the fluctuations are so much that the promoters don't have the cash to manipulate stock prices in most companies.
Now, why did LASA give 10% shares to OSCL. Well, again, no manipulation. OSCL funded the unit 5 that LASA has received. So why will LASA not have to pay OSCL? They will have to compensate them. Does that not make sense?
Now, start of unit 5.
Yes, a very valid question. Personally, as mentioned, I think it will start soon. Now more specific, personally, if the Unit 5 does not start by end of october, I might exit LASA because there is now no reason as to why Unit-5 is not starting. I could understand till now that even if it unit might be ready to begin operations, they were just listing and might not have had the time to put the efforts in parallel starting a complex unit.
Criticisms and Questions welcome.